Global Firms Eye African Market

Aug. 17, 2013 - 03:45AM
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Arms Deal: A South African Defense Force soldier carries a Denel SS77 machine gun during a field exercise. Pretoria-based Denel is working with Swiss company B&T on projects that include upgrading the manufacture kits for the SS77. (Marine Corps)

BULAWAYO, ZIMBABWE — Projections that African defense spending will surpass US $20 billion over the next decade have sparked cut-throat competition between non-African companies looking to snap up supply, joint venture and technology transfer agreements with African firms. Meanwhile, other companies are giving themselves a more competitive edge by setting up shop in the continent.

According to defense market analysts, demand for military hardware in Africa is set to increase as governments gear up to fight terrorists and Islamic militants. Nations say they need better firepower, modernized forces, improved armed mobility and stronger force protection to fight militants that have become the scourge of nations throughout East, West and North Africa.

“The scramble for the African defense market has just begun, and it will continue over the next decade,” Zimbabwean military and strategic defense analyst retired Col. Joseph Sibanda said.

South African defense equipment manufacturers are benefiting the most from the new interest, having signed wide-ranging arms sales and production deals with Swiss, US, Russian, Brazilian, Malaysian and French companies. US-based Colt Defense recently launched its bid for the Southern African market when it signed an agreement with specialized South African sniper rifle manufacturer Truvelo Armory for the joint manufacture and sale of all Colt firearms to regional police and military forces.

Speaking at the signing ceremony in South Africa, Thomas Sullivan, Colt Defense’s international sales manager, said although the company hopes to continue expanding the strong civilian customer base it has in South Africa, it is setting its sights on the regional military, law enforcement and sporting rifle markets.

“South Africa will become a target market [for police and military firearms]. There is a demand here, and we want to meet that,” Sullivan said.

Alexa Gerrard, Truvelo’s head of sales and marketing, said the joint venture with Colt Defense, which has a bigger market share in North Africa, will help the South African company expand its product range to include highly accurate barrel products, precision rifles, high-quality pistols, carbines and assault rifles.

A few days after the signing of the Colt Defense-Truvelo deal, Denel and Swiss company B&T signed a technology transfer agreement paving the way for the South African state-owned company to produce and market small arms ranging from sub-machine-guns to grenade launchers.

According to the agreement, Denel will initially manufacture the weapons using Swiss-made parts while upgrading its production plant to produce the parts locally. Among the weapons set for production is the GL-06 40mm single-shot grenade launcher for the police and military. Denel will also adapt B&T’s MP9 9mm sub-machine gun and reproduce it as the GMP9, a closed-bolt weapon that is standardized for different attachments such as suppressors, shell catchers, red-dot sighters and holsters. A lighweight and modular weapon, the GMP9 can accept 15- to 30-round magazines.

The two companies are also working on upgrading the manufacture kits for Denel’s SS77 7.62mm machine gun, including a redesigned rail, top cover, magazine and belt attachments.

On the aviation side, over the past two months, Denel Aviation signed a repair and service agreement with Eurocopter, a division of Europe-based EADS, covering all AS332 Super Puma, Bo 105, AS350 Ecureuil and Alouette helicopters in Africa.

More than 250 Eurocopter helicopters are used in the private sector, corporate civil operators, the military, law enforcement, emergency rescue and para-public organizations in Southern Africa and Kenya. The agreement also stipulates that Denel Aviation will overhaul specialized helicopter transmission systems and rotor blades for Puma and Super Puma helicopters. The company’s responsibilities also extend from light to deep maintenance, servicing and repairs of individual components up to complete overhauls covering both civil and military helicopters.

Eurocopter Southern Africa CEO Fabrice Cagnat hailed the agreement as a recognition of “Denel’s proven rotorcraft engineering expertise and its reputation for top quality and competitively priced service.” The agreement becomes its second major international military and civilian aviation service deal following the signing of a maintenance, repair and overhaul agreement for Russian-made Mi-8 and Mi-17 helicopters across Africa.

Denel Aerostructures has also clinched a deal to support the development of Airbus Military’s A400M airlifter in a package worth more than $2 million. Denel Aerostructures will design the A400M’s aero-structures and manufacture the ribs, spars and swords that form the plane’s support structure.

Turkish armored vehicle manufacturer Otokar is also seeking to expand its presence on the African continent with its Cobra light armored vehicle.

The company, which first displayed its armored products at the Africa Aerospace and Defence Exhibition last year, said it is pushing hard to develop new defense equipment supply deals with Africa. Algeria, which has a number of Cobra light armored vehicles, is among the African countries targeted for Otokar’s expansion into Africa.

Competition for East African armored vehicles stiffened in October when South African expeditionary and tactical equipment manufacturer Osprea Logistics established a factory to manufacture Mamba Mk5 armored personnel carriers in Mombasa, Kenya. The move brings the company closer to Somalia and Sudan where the Mamba Mk5 is widely used by United Nations and African Union peacekeeping forces there.

The Serbian Military Technology Institute last year secured a foothold in the African defense market when it signed a deal to supply Yugo-import Lazar BVT mine-resistant, ambush-protected vehicles and 18 Nora B-52-155mm artillery systems to the Kenyan Defence Force.

Together with Serbian ammunition manufacturers Krusik, Sloboda and Prvi Partizan, Yugo-import last year was awarded a $400 million contract to build three military factories in Libya, Egypt and Algeria to meet the regional demand for military hardware. Sensing the high demand for armored military vehicles, United Arab Emirates-based Tawazun Holdings also last year signed an agreement to set up a plant to manufacture NIMR armored vehicles in Algeria for the North African market.

Sibanda, the defense analyst, said Africa will remain attractive for international defense equipment manufacturers due to heightened demand.

African nations, he said, also need to refocus their strategic defense and deterrent capacities to protect newly found on-shore and off-shore hydro-carbon resources, such as natural gas and petroleum interests.

“Africa will in the next few years rise to become a defense market almost at the same level with Southeast Asia and the Middle East. Defense products like military aircraft, armored vehicles and advanced artillery systems will be top on the list as African militaries and law enforcement authorities modernize to meet new security threats,” Sibanda told Defense News. “South African companies are especially better positioned to make the best out of this business opportunity given their excellent track record in meeting continental defense needs.”